City of London Investment Group (LSE: CLIG) was trading modestly higher following the release of latest trading details, the stock last up 1% in Wednesday business.
The emerging markets-focussed asset manager advised that funds under management leapt 17% to $4.7bn as of June 2017, up from $4bn a year earlier. In sterling terms, funds jumped to £3.6bn from £3bn at the same point in 2016.
City of London announced that the MSCI Emerging Markets TR Net Index rose by 24% in US dollar terms over the same period. The company reported negative net asset flows in Emerging Markets of $306m as clients rebalanced into the significant emerging market equity gains, while net asset flows were positive ($26m) in the Diversification strategies.
And the asset manager noted that net mandate wins of around $125m have been confirmed for early in the new financial year.
Rich returns?
Those seeking explosive earnings growth need to give City of London serious attention, at least if current broker forecasts are anything to go by.
It is expected to follow an anticipated 47% earnings rise in the year to June 2017 with a 10% bounce in fiscal 2018. And these projections make the business a brilliant bargain buy, in my opinion.
Not only does the company sport a mega-low forward P/E rating of 10.8 times, but a PEG rating of 1.1 rubber stamps City of London’s position as a great value pick.
There is also plenty for dividend hunters to celebrate. Analysts expect the business to lift an estimated 24.7p per share payout for the last year to 26.8p in the present period, resulting in a mammoth 6.6% yield.
But given that City of London is on course to beat this projection – the firm today vowed to pay a 25p per share total dividend for fiscal 2016 – this year’s estimate could also surprise to the upside.
And I believe City of London should continue to provide powerful earnings and dividend expansion in the years ahead as economic growth in so-called developing regions steams ahead.
Money master
Arrow Global Group (LSE: ARW) is another London stock that City forecasts suggest could be dealing much too cheaply.
The credit manager is expected to keep its long-running growth story trucking with bottom-line rises of 28% and 25% in 2017 and 2018, respectively. And these estimates make it a terrific value play – the company carries prospective P/E ratio of 13 times, and a PEG rating of just 0.5.
Arrow Global is expected to keep its programme of delivering chunky annual dividend growth rolling, too. Last year’s 9.1p per share dividend is predicted to improve to 11.3p in the present period, and again to 14.2p in 2018.
As a result Arrow Global’s yield jumps from 2.6% this year to a satisfying 3.3% in the next period.
The Manchester firm’s European expansion programme continues to pay off big time, with group revenues exploding 75% during January-March and underlying pre-tax profits rising 37%. And I reckon Arrow Global’s drive to boost its continental footprint, and to diversify its revenues, should create excellent shareholder rewards in the years ahead.
